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Those of you who enjoyed "The Millionaire Next Door" and "The Millionaire Mind" should also enjoy this book. It's based on several studies done by Juliet Schor (The Overworked American) regarding spending habits and our compulsion to "keep up with the Joneses." She also gives some insight into who "The Jones" are. They're what she calls a "reference group"--who we associate with and therefore compare ourselves against. (When polling for reference groups, she only included "real" people, not celebrities, TV families, etc., though she points out that these groups also do much to promote spending.)

The most common reference groups were friends (real people, not the TV show...) and coworkers. Very few said actual neighbors were their reference group, as most of us no longer know them. She actually came up with a statistical regression to estimate the savings rate of individuals based on variables such as age, race, education, hours per week watching TV, and financial status compared to reference group.

Anyway, what this long intro is leading up to is what she has to say about the millionaires next door (esp. in regard to educational level):

Now we can understand why the millionaires next door--in contrast to most Americans--save so much. They never change their reference groups. [emphasis mine] They don't move into the most upscale neighborhoods. They don't start emulating Bill Gates or Malcom Forbes, and they don't change their friends. They keep on drinking Budweiser. And there's something else. The millionaires next door tend not to have too much formal education. According to my results, that's good for the bank balance. Controlling for other factors, it appears that the more education a person has, the less he or she saves. Each additional level of education reduces annual savings by $1,448. More education also leads to more shopping, particularly for women. Women with graduate degrees spend more time shopping than individuals in any other category. Apparently people with more education are more status-oriented, more tuned in to identity and positional consumption, and more concerned about keeping up with the upscale groups to which they aspire and belong. It's hard to say why. Maybe the more status-conscious among us are more likely to stay in school. Or maybe status orientation is a value system that we learn in school. But whatever the causality, the outcome seems clear: the highly educated are more immersed in the culture of upscale acquisition.

I'm not done with the book yet, but it's already been eye-opening. I might post some more as I come across interesting tidbits.

woman with a graduate degree (but I don't like shopping...really!)
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